When Entertainment One, the Canadian company responsible for releasing everything from La La Land to Sicario, announced in June that is was ceasing film distribution operations in the country, it wasn’t so much a canary-in-the-coal-mine moment as a confirmation that the rotting corpse of the canary was, indeed, dead.
“When [toy company] Hasbro bought E1 in 2019, the writing was on the wall,” says Charles Tremblay, president of the Montreal-based distributor Sphere Films (Crimes of the Future). “They were once huge, but hadn’t been active in the English-language market for a while.”
Still, when combined with a tidal wave of pandemic-era industry shifts, the E1 exit signals an inflection point for Canada’s many independent film distributors: that is, those companies that aren’t satellite operations of Hollywood studios such as Disney or Warner Bros., and which are responsible for funneling everything from Canadian movies to independent U.S. cinema to foreign-language films onto domestic screens of all sizes.
“We can put lipstick on a pig and say that the E1 news is good because it creates opportunity for someone like us, but ultimately you want competitors. And that’s not an indication of a healthy market,” says Noah Segal, co-president of Elevation Pictures (Paw Patrol: The Movie) who, like most people in the country’s film sector, worked at E1 at one point in his career. “We have to view E1 as a wakeup call. We all have to think about what happens next.”
So what does happen next? On the eve of the first real-deal Toronto International Film Festival in three years, here are the major challenges – and possible solutions – to getting the industry back to a place where Canadian culture, and business, can thrive.
Problem: The window is shrinking
In the Before Times, a film would open theatrically and take upward of 90 days to make it to less profitable downstream markets such as digital purchase, premium video-on-demand (PVOD), subscription video-on-demand (SVOD, including streamers like Netflix), cable TV, and so forth. Today, the window of time it takes a film to move from cinemas to digital has narrowed anywhere from 45 days to two weeks to nothing at all.
This is more a problem, and a devastating one, for theatre-owners than distributors – producers have long pointed out that films make most of their theatrical money in the first few weeks of release, so why not move on once most big-screen interest has waned? But there are knock-down effects.
“PVOD was a great, smart way to fill in for the loss of the theatrical window during the pandemic, but now there’s a shrinking of the window to go to SVOD, which shrinks the entire transactional window,” says Laurie May, co-president of Elevation alongside Segal. “If that keeps shrinking, it shrinks revenue sources.”
Solution: Turn a window into a door
With Disney and Netflix planning ad-supported streamers, distributors might be able to find new revenue opportunities. There are also ever more streamers coming into the game that need content – May points to Paramount+ as a hungry new player – and larger outfits such as Elevation and Mongrel Media have robust catalogues ripe for the picking.
Plus, audiences’ increased comfort with accelerated digital releases can help distributors find new life for smaller films that are tough sells theatrically.
“At the end of the day, there are more people watching content than ever before,” says Justin Rebelo, chief executive of Vortex Media (Peace By Chocolate). “Good content finds the audience that it’s meant to find.”
Problem: Streamers want the world
Before the great streaming war started, the path for independent movies was relatively straightforward. A film would play at a festival or be showcased at an industry market, and companies would bid to distribute in their respective territories. Today, streamers are snapping up films for huge paydays contingent on exclusive global rights, shutting smaller players out.
“Unless you’re getting in very early, like in the prebuy or promotional stage, it gets scooped up by streamers,” says Dave Hudakoc, managing director of levelFILM (Scarborough). “The number of available films is getting fewer and fewer.”
Solution: Make your own dang movies
Increasingly, distributors are attaching themselves to projects at the very beginning. Elevation got deep into production in 2016. Vortex produced the well-received 2020 horror Anything for Jackson, and is premiering its next production, the Canadian comedy The End of Sex, at TIFF.
“We’re pursuing the acquisition of U.S. content aggressively, but we’re also wide-eyed about the opportunities that have popped up on the diversification front,” says Harry Grivakis, senior vice-president of VVS Films (The Card Counter), which last month promoted staff to expand production efforts.
“It’s important to be closer to content creation – you protect yourself,” says Elevation’s Segal, whose slate is almost one-quarter produced in-house. He adds that if Bill C-11 passes this fall and streamers are compelled to contribute to homegrown productions, the company will be able to produce that much more Canadian content.
But expansions beyond traditional distribution don’t always pan out.
Last year, Mongrel launched a SVOD service, Mongrel Home Cinema, with the aim of leveraging its art-house catalogue (Boyhood, Brooklyn) to lure viewers exhausted by Netflix fare. The initiative was quietly shut down this past June. Meanwhile, Tremblay, who launched a VOD platform in 2020 before his company MK2 / Mile-End was acquired by Sphere, says that the service is now “under reflection” and not a priority.
Problem: Canada is missing its own A24
While the U.S. has such cool-kid, social-media-savvy players as A24 (responsible for such zeitgeist bait as Uncut Gems and Everything Everywhere All At Once) and Neon (a sorta-offshoot of the Alamo Drafthouse Cinema chain notable for Parasite and I, Tonya) to stand out from their indie- and Disney-sized competitors, Canada’s players are mostly brand mysteries to all but the most attentive cinephiles.
“A24 has brand loyalty, and audiences come out for their films, no matter if they produced them or acquired them. I don’t think that holds true for any other independent distributor,” says Andrew Frank, vice-president of sales and acquisitions for Mongrel.
Solution: Create an Eh24 of our own (sorry, not sorry)
Okay, this might not quite work in Canada’s intensely smaller market. But there is potential.
Elevation, which has an output deal with Neon, plus other relationships and a robust Canadian slate, has just enough cultural cachet to become a brand unto itself. Mongrel has a trusted curatorial history. And VVS is synonymous with guilty-pleasure genre fare. At least for audiences who pay attention to opening title cards.
But Canada’s very own mini-A24 might be found in more up-and-coming players, such as Game Theory Films. Launched in 2018, the company boasts a lineup dedicated to bold, diverse Canadian storytellers (Spinster, The White Fortress) – and this summer secured a fresh injection of seven-figure equity from a private investor that will push it into a larger market space.
“We work with our filmmakers in a one-on-one collaborative way, with a tailored release strategy,” says Hillary Hart, co-president of Game Theory alongside William Woods.
LevelFilm, which had a minor hit this spring with Scarborough, sees a similar opportunity.
“What compels us is finding that underrepresented voice that doesn’t fit in the mould of a larger company,” Hudakoc says. “And we want to help those filmmakers find the path for their next project, too.”
Problem: Older audiences have left the building
One of the consequences of shutting theatres down for almost two years is that older audiences with more sophisticated, non-Marvel sensibilities have fled for the comforts of home, perhaps forever.
“We don’t know if they’re going to come back, which is of course a problem as they’re our main audience,” says Chantale Pagé, president of the Montreal-based distributor Maison 4:3 (The Happening, Aline).
Solution: Um, this one is tricky, but here’s some money!
The wild success of Top Gun: Maverick is universally cited as evidence that the market is recovering. But Canadian indies aren’t getting such a Cruise-sized missile of a movie any time soon. So in the meantime, the federal government has pledged $9.2-million from its $50-million Canada Arts and Culture Recovery Program to support theatre-owners and distributors, with details to come this month.
For now, most in the sector are glad that no distributor – E1′s corporate priority shift notwithstanding – folded outright during the pandemic.
“Canadians are great at keeping low cost centres. The running joke in L.A. is that whenever a new distributor starts up they have gorgeous office space and bring 35 people to Sundance,” says Elevation’s Segal, whose company didn’t lay off a single person during the pandemic, pivoting their theatrical sales team to digital. “Canadians are good at keeping it on the down-low. We’re not bougie.”
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